Exploring the Dynamics of Korean Markets and Consumer Behavior During Chuseok
Chuseok, often referred to as Korean Thanksgiving, is one of the most significant traditional holidays in South Korea. This period, marked by gratitude for the year’s harvest and honoring ancestors, sees families and friends coming together to celebrate with elaborate feasts and ancestral rites. However, the contemporary landscape of Chuseok is evolving, reflecting broader changes in Korean society. While traditional practices remain integral, many Koreans are finding diverse ways to spend the holiday, balancing cultural heritage with modern lifestyles. The retail industry, food pricing dynamics, and consumer behavior during this period offer a fascinating glimpse into the interplay between tradition and modernity in South Korea.
One of the notable trends observed in recent years is the sharp rise in food prices at highway rest areas. According to data released by Korea Expressway Corp., a Ministry-supervised organization, the average price of popular dishes such as udon has seen a significant increase. In July this year, the price of udon was recorded at 6,623 won, marking a 21.4% increase from 2020. This steady rise in cost over the past four years, from 5,455 won in 2020 to 6,526 won in 2023, highlights a broader trend of increasing food prices at these rest stops. The data, requested by a member of the National Assembly, underscores the impact of inflation on everyday expenses for travelers and locals alike.
The price hike is not limited to udon alone. Tonkatsu, another popular dish, saw its average price rise to 10,653 won in July, a 21.3% increase from the previous period. This makes it the only item among the top 10 sellers to exceed an average price of 10,000 won. Similarly, bibimbap, a beloved Korean dish, stood at 9,650 won in July, reflecting a 17.6% increase. These increases are particularly significant when compared to the overall cost of living index, which saw a 17.2% rise in the same timeframe. Other popular dishes also experienced price hikes, ranging from 4.7% to 13.2%, further illustrating the broader trend of rising food costs at highway rest areas.
The impact of these price increases extends beyond individual dishes. Instant noodle prices jumped by 11.2% to 4,885 won, while hot dogs saw an 11.4% increase to 4,151 won. Even beverages were not spared; a cup of americano was sold at 4,507 won, a 13.2% increase, and a cup of latte was priced at 4,919 won, a 4.7% increase. These figures, all higher than the overall cost of living index, suggest that dining out at highway rest areas has become considerably more expensive over the past four years. This trend raises concerns about the affordability of food for travelers and locals who rely on these rest areas for their meals.
In contrast to the rising food prices at highway rest areas, the Moran Folk 5-Day Market in Seongnam offers a different perspective on consumer behavior and market dynamics. Located in Gyeonggi Province, this market is bustling with activity, especially in the lead-up to Chuseok. First opened in 1962, the Moran Folk Market is touted as Korea’s largest folk market, operating only on specific days of the month. Vendors here sell a wide variety of goods, including household items and food products, attracting both locals and tourists. The market’s vibrant atmosphere, characterized by vendors shouting out deals and customers bargaining for the best prices, provides a stark contrast to the more structured pricing seen at highway rest areas.
The Moran Folk Market is particularly significant during Chuseok, as families flock to stock up on ingredients for the holiday feast. The market serves as a hub for pre-Chuseok shopping, offering a wide range of traditional foods and unique handmade items that cannot be found elsewhere. Despite the modernization of Korea, the market maintains its traditional charm and values, making it an important part of the local community. It also serves as a platform for small businesses and entrepreneurs to showcase their products, contributing to the local economy and preserving cultural heritage.
Amidst the bustling market scene, the Korea Chamber of Commerce and Industry (KCCI) conducted a survey revealing interesting insights into consumer behavior during Chuseok. Despite inflation and economic challenges, most South Koreans plan to spend a similar amount or even increase their spending on Chuseok gifts this year. The survey highlights a social consensus among Korean consumers to exchange gifts during the holiday, with fruit being the most popular choice across all age groups. Health supplements and meat are also favored by different demographics, reflecting a blend of traditional and contemporary preferences.
Cost-effectiveness remains the top consideration for all age groups when purchasing Chuseok gifts. However, younger consumers also prioritize trendiness and brand popularity, indicating a shift in consumer behavior. More than half of the respondents prefer to purchase Chuseok gift sets at large supermarkets, followed by e-commerce sites, department stores, and mobile gift certificates. Traditional markets, despite their cultural significance, are the least preferred purchasing channel due to the high sensitivity to quality and the need to compare products directly. This trend underscores the changing dynamics of retail preferences among Korean consumers.
The survey also sheds light on the preferred recipients of Chuseok gifts. Parents are the most common recipients, followed by close acquaintances, colleagues or superiors, and children or teachers. This reflects the importance of familial and social bonds during the holiday. Despite economic challenges, the tradition of exchanging gifts during Chuseok remains strong, highlighting the cultural significance of the holiday. The KCCI survey, conducted among 1,000 Koreans aged 20 and older, provides a comprehensive overview of the factors influencing purchasing decisions and the enduring importance of Chuseok in Korean society.
As Chuseok approaches, the Korean retail industry ramps up its marketing efforts to cater to diverse consumer groups. Department stores and large marts are at the forefront of this push, offering a wide range of promotions and discounts. Department stores, in particular, focus on premium and limited-edition gift sets to attract customers. For instance, Lotte department store’s Busan main branch features exclusive offerings such as ‘chateau petrus,’ a renowned wine priced at 10 million won per bottle, and a limited-edition yamazaki whiskey set. These high-end products cater to consumers looking for luxury and exclusivity in their Chuseok gifts.
Shinsegae department store’s centum city branch also emphasizes luxury with its Chuseok offerings. Premium items like ‘chateau haut-brion’ and Shinsegae’s ‘5-star luxury’ series are available until mid-September. High-end meat sets, such as ‘premium hanwoo special,’ and meticulously selected fruit sets like ‘premium select farm hamper,’ reflect the store’s commitment to quality. Seafood sets, including ‘premium traditional gulbi,’ are also available, showcasing the diverse range of premium products on offer. These promotions highlight the retail industry’s efforts to cater to consumers seeking premium and exclusive Chuseok gifts.
On the other hand, large marts take a different approach, focusing on family-friendly food discounts. Homeplus, for example, is running a ‘galbi universe’ event, offering up to 40% off on holiday foods like braised short ribs. Myhomeplus membership members can receive additional discounts on products such as ‘american choice refrigerated braised short ribs.’ E-mart is also offering deals on seasoned pork and salmon, with discounts of up to 43% on select items. These promotions, lasting until early October, aim to attract budget-conscious consumers looking for value and affordability in their Chuseok shopping.
The evolving landscape of Chuseok celebrations reflects broader changes in Korean society. While traditional practices remain integral, many Koreans are finding new ways to spend the holiday according to their personal preferences. Some choose to travel, both domestically and internationally, while others opt for ‘me time’ and stay in the country. The rise of single-person households and changing family structures have also contributed to more diverse ways of observing Chuseok. Despite these changes, the holiday remains an important time for Koreans to give thanks and connect with their families and ancestors, blending tradition with modernity in a uniquely Korean way.